Starbucks puts spotlight on China as U.S. growth cools

SHARE:

LOS ANGELES - Starbucks Corp's new chief executive said the world's biggest coffee chain is making a long-term investment in China, amid worries that growth from its dominant U.S. market is cooling.

Kevin Johnson, who succeeded Starbucks co-founder Howard Schultz as CEO in April, is tasked with the difficult job of finding new ways to deliver the robust growth that Wall Street has demanded from the popular chain.

The urgency of Johnson's mandate was underscored on Thursday, when the Seattle-based company posted quarterly profit that just matched analysts' estimates. Starbucks also tempered expectations for the current quarter as it grapples with softness in the U.S. retail and restaurant industries and said it would close all 379 of its Teavana stores.

Shares of the company, which is often punished by investors when it does not exceed Wall Street's expectations, tumbled 5.5 percent to $56.24 in after-hours trading.

The financial report, the first under Johnson's guidance, landed just hours after Starbucks said it would buy the remaining 50 percent stake of its East China business from its joint venture partners for about $1.3 billion, in its biggest ever acquisition.